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India's Forex Swap Scheme and Diaspora Deposits Boost Bond Markets
India has launched a forex swap initiative and FCNR(B) deposit scheme aimed at attracting foreign currency deposits from its diaspora. According to HDFC Securities' CEO, the program has been characterized as an unprecedented success, with projections of an additional $12 billion in deposits. Major international banks, including HSBC, have begun deploying funds collected through the scheme into Indian government bonds, with HSBC investing at least $3 billion since July.
Key takeaways
- 1.India's forex swap and diaspora deposit schemes are attracting significant foreign capital inflows from international banks and diaspora investors
- 2.HDFC Securities projects the FCNR(B) deposit initiative could generate up to $12 billion in additional foreign currency deposits
- 3.Banks are actively deploying collected diaspora funds into Indian government bonds, with HSBC's $3 billion investment demonstrating institutional confidence in the program
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